UK company SLC puts Rs 328 crore contract with HCL Tech under review

SLC had signed the IT transformation deal with HCL in 2014. As part of it, HCL had to work with two other partners to replace SLC's core systems to cater to student loan service.Shilpa Phadnis | TNN | June 10, 2016, 14:13 IST

BENGALURU: UK-based government lender Student Loans Company (SLC) has put its Rs 328-crore IT outsourcing contract with HCL Technologies under review.

SLC had signed the IT transformation deal with HCL in 2014. It was worth £34 million (Rs 328 crore) over 5 years, with the possibility of it being extended for another 5 years and the contract size rising by a further £12 million (Rs 114 crore).

The deal puts the spotlight on the complexities and risks involved in pulling off huge transformation programmes that involve a consortium of vendors tuning up legacy systems.

As part of the contract, HCL had to work with two other partners, Deloitte and Misys, to replace SLC's core systems to cater to student loan services and expanding volumes of loans.

HCL led the project as the systems integration partner. Deloitte was the implementation partner and Misys the provider of the core banking software. SLC was set up in 1989 to provide loans and grants to students in universities and colleges in the UK.

The objective was to support borrowers who seek to meet their repayment obligations and stronger action against those who do not, delivering a better return on public investment.

The spokesperson of the Department for Business Innovation & Skills, which oversees SLC, said SLC is reviewing its contract with the IT supplier to ensure an outcome which delivers the best value for money for the taxpayer.

When contacted, HCL Technologies said it has already delivered a part of the implementation phase. "The overall success of this project is beyond the singular scope and control of HCL. The business risk impact on HCL is insignificant," it said.

Peter Bendor-Samuel, chief executive of US-based Everest Research, said SLC had aged IT systems which were inhibiting its ability to compete and adequately serve its customers.

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